Pay for Performance: Should Fannie and Freddie Executives Be Receiving Millions In Bonuses?
Chairman's Preview Statement
Chairman Issa Hearing Preview Statement
This hearing will examine the validity of bonuses paid out to executives at Fannie Mae and Freddie Mac. In the aftermath of the financial crisis, President Obama offered direct and pointed criticism of entities that received taxpayer dollars but continued to pay executives millions of dollars in compensation and bonuses calling the payments "obscene" and "shameful."
Since entering a conservatorship status, Fannie and Freddie have become de facto arms of the government and have received $169 billion from the Treasury Department and still have an outstanding balance of $141 billion owed to the taxpayers. Despite this outstanding balance, Fannie and Freddie's top six executives received $35 million in compensation. Of that, $12.79 million were bonuses awarded to Fannie and Freddie's top ten executives.
This hearing asks important questions on behalf of the American taxpayers who are footing the bill for Fannie and Freddie. Is the concept of pay-for-performance being applied appropriately? Should these executives of a government-sponsored entity profit while taxpayers foot the bill? What measurable standards, if any, are in place to properly and accurately evaluate performance? Are these bonuses being awarded for your efforts to minimize losses for taxpayers or are they payouts to for the degrees in which you help the Obama Administration achieve a policy agenda?